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Stolen Cheque

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STOLEN CHEQUE. For most pur poses a cheque is legally regarded as a bill of exchange ; but the law is not quite the same with regard to the two instruments, at least as far as the larceny of them is con cerned. The civil liability when a bill is stolen has been referred to in the last article, but it would appear that when a cheque is stolen, the position of the banker is peculiar. The crossing of cheques, and the marking of them as " not negotiable," have safeguarded the public to a remarkable extent by making it more difficult for a thief to obtain cash for the cheques, though the mere crossing of a cheque does not affect its negotiability if it is regular in every other respect. If a cheque is stolen whilst in course of trans mission, a holder in due course is entitled to the amount of it, and may sue the drawer or any other party to the cheque upon it if payment has been stopped. But, of course, if the cheque is specially indorsed and the indorsee's signature has not been added, an unauthorised or a forged signature would be appended, and through this signature (by Section 24) no title could be made to it. The property would remain in the last indorser.

In the case of a cheque which has been crossed with the addition of the words " not negotiable " any person taking such a cheque shall not have, and shall not be capable of giving a better title to the cheque than that which the person had from whom he took it. (Section 81.) If the banker on whom an open cheque is drawn pays it in good faith and in the ordinary course of business, then (by Section 60) the banker is entitled to charge his customer, and there is no responsibility resting upon him if the indorsement has been forged and the cheque stolen. If the cheque

is payable to bearer, or if, after having been made payable to order it bears the true signature of the indorsee, it gets into circu lation, it becomes the property of any holder who has taken it in good faith and has had no reason to doubt that it was regular in every respect.

In the case of a crossed cheque which has been stolen, the banker on whom it is drawn is protected if he pays it in accordance with Section SO, and a collecting banker in accordance with Section 82. (See CROSSED CHEOLTE.) At a first view it seems that the position taken up by a banker as to paying a cheque drawn upon him without his knowing that it had been delivered or issued is not quite in accordance with the law. But as far as practice is concerned, it seems that the position is correctly stated in Morse's " Law of Banking " (4th ed., p. 687) : " If a cheque is stolen, or if after being lost by the drawer it is found by some other person, it is not, in the hands of the thief or of the finder ' issued ' as against the drawer. But so far as concerns the bank, it would be considered as issued, and the bank would be protected in paying it, provided it did so bona fide, and with no knowledge of the precedent circumstances." (See Section 21 of the Bills of Exchange Act, 1882.)